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Commercial

The Legal 500 Lists the UKs Top Litigation Financiers 

Editor's note--Legal 500 first published the below rankings in 2021. This ranking has resurfaced in 2022, though to our knowledge Legal 500 has yet to update its rankings, nor has it published its methodology.  The inaugural edition of the Legal 500 list of top litigation finance franchises in the United Kingdom has been published. Legal 500 likens litigation investment to tennis, in that winners are decided by those who hit the ball out of bounds less than their rivals. The Legal 500 says top litigation investors look to make four to ten times the cost of investment when choosing claims for funding.  The Legal 500 alludes to innovation in the litigation finance space, and cites portfolio funding as the crux of a successful legacy franchise. With safety in numbers, the best-performing litigation investors are navigating market ebbs and flows through portfolio risk mitigation. Litigation Finance Journal has collated a list of the Legal 500’s leading UK litigation financiers below: 

Rankings Table

First Tier
  • Burford
  • Harbour
  • Therium
Second Tier
  • Augusta
  • LCM
  • Omni Bridgeway
  • Vannin Capital
Third Tier
  • Bench Walk Advisors
  • Balance Legal Capital
  • Woodsford
Commercial

Video: Mass Tort Finance Innovation 

Max Volsky (co-founder, chief investment officer and general counsel at Lexshares), recently profield how Lexshares approaches funding mass tort claims. According to Mr. Volsky, Lexshares often funds firm portfolios composed of meritorious mass tort claims. Mr. Volsky says that Lexshares’ products and services are designed for individual attorneys and large law firms alike.  In the video interview, Mr. Volsky walks through various scenarios of the Lexshares mass tort review process. Volsky says that the non-recourse nature of litigation finance is an attractive feature for many, as opposed to traditional finance options. Volksy says that if a story is interesting and the case has value, Lexshare is happy to consider these characteristics for mass tort funding review.  Click here to watch the full mass tort interview with Mr. Volsky.
Commercial Regulatory Issues

The Arkin Cap Debate 

The Arkin Cap has traditionally been a guide associated with governerning the costs of litigation finance agreements. However, over a series of recent rulings, justices in the United Kingdom allude to their own autonomy, given individual case nuances. This implies that the concept of the Arkin Cap is not guaranteed in any litigation.  Insights outlined by Stewarts Law profile though surrounding the Arkin Cap as a binding rule. With various organizational matters part of litigation finance agreements, modern interpretation of the Arkin Cap has evolved. For example, the Arkin case included a litigation finance agreement that only covered a portion of case costs.  Since the Arkin case, similar scenarios have occurred, where justices have precluded the Arkin Cap under other contractual arrangements. Click here to learn more about the latest Arkin Cap debates.    
Case Developments Commercial

Global Electricity Cartel Faces Class Action 

Burford Capital is funding litigation exploration of a potential claim that alleges that some of the world’s largest electricity cable makers conspired to inflate cable prices in a fraud paid for by millions of consumers in the United Kingdom. The higher costs of the alleged cable fraud have been passed onto consumers since April, 2001.  According to reports on the matter, a similar cartel operated between 1999 and 2009, in which $319M in fines were awarded. Given that consumers pay for the high voltage cables as part of their utility bills, the new case aims to recover damages and court costs associated with any modern electricity cartel operating at the expense of United Kingdom consumers.  Click here to learn more about the case.
Commercial Deals

MoneyWeek on Bankrolling Global Litigation Finance 

Top-30 law firms in the western world hold $2T in pending arbitration claims, while raking in $860B in yearly fees associated with litigation. MoneyWeek takes a deep dive, profiling the best techniques for bankrolling litigation finance globally.  MoneyWeek says that the value of high stakes litigation is increasing exponentially. Different approaches to litigation investment include non-recourse, insolvency and crowdfunding so retail investors can participate.  MoneyWeek describes litigation finance as an asset class that avoids cyclical market events that impact interest rates and bond markets. However, MoneyWeek raises alarm bells that cross-border accounting of unsavory litigation finance houses will be a cause for the industry’s eventual consolidation.  MoneyWeek profiles Burford Capital’s approach to the funding market, given Burford’s top position as a global legal funder.  
Commercial

Litigation Investment Ethics for the Modern Attorney

With $11B in assets under management in the United States, litigation investors are looking to a global market of attorneys who are engaging modern financial solutions to meet client demands and needs. The ethics behind pure litigation marketplace innovation is something that LexShares says is imperative. A collated collection of whitepapers and scholarly articles concerning global litigation investment ethics are below.  Litigation Funding Ethics acts as an organized primer for the modern attorney. The guide explores large jurisdictions such as New York, Delaware and Texas.  Ten of the 12 chapters from the guide explore top ethical insights impacting United States litigation finance innovation. Click here to read LexShare’s insights on ethical matters impacting the industry. 
Announcements Deals

Litigation Finance Agreement for new representative claim against Google and DeepMind Technologies

Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specializing in dispute financing solutions internationally, announces that it has entered into a litigation finance agreement for a new representative claim.

The finance agreement is to fund a new representative action in the High Court of Justice of England & Wales brought on behalf of up to 1.6 million individuals against Google and DeepMind Technologies for the unlawful use of patients’ confidential medical records.

The claim is for the misuse of private information and arises out of an arrangement formed in 2015 between Google and DeepMind and the Royal Free London NHS Foundation Trust. The tech companies obtained and used a substantial number of confidential and private medical records without patients' knowledge or consent.

This representative claim being brought by Mishcon de Reya, provides access to justice and a means of compensation which would not have been viable on an individual basis due to the cost of the litigation process. Not only does it provide a means of redress to those affected by the misuse of their private and confidential medical records but this is also a significant claim for LCM to support and fund.

Patrick Moloney, CEO of LCM, commented: "LCM has a long and deep experience in funding large scale actions, many of which would not be possible without litigation funding. As pioneers of the industry, we are well-placed to support the claim in this action."

ABOUT LCM

Litigation Capital Management (LCM) is an alternative asset manager specializing in disputes financing solutions internationally, which operates two business models. The first is direct investments made from LCM's permanent balance sheet capital and the second is third party fund management. Under those two business models, LCM currently pursues three investment strategies: Single-case funding, Portfolio funding and Acquisitions of claims. LCM generates its revenue from both its direct investments and also performance fees through asset management.

LCM has an unparalleled track record driven by disciplined project selection and robust risk management.

Currently headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.

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Consumer

New York’s Clergy Concerned About Consumer Litigation Funding Act 

This week, Litigation Finance Journal reported that the New York State Assembly is debating ‘Bill A.1270-A,’ which is referred to as the Consumer Litigation Funding Act. Meanwhile, New York City and State Clergy leaders have co-signed a letter of objection to the Consumer Litigation Funding Act’s thematic intent(s). However, New York’s clergy leaders signaled support for mindful regulation of litigation investment agreements.  New York’s clergy leaders' damnation of the Consumer Litigation Funding Act is further buttressed by Assemblyman Erik Dilan’s bill A.3315. Mr. Dilan’s approach is to juggle ethics and transparency to pioneer litigation funding regulatory standards.  Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC), had this to say about the proposed bill: "A1270-A is being promoted as a good piece of legislation to help protect consumers, when all it does is harm consumers. It eliminates the product from the state. It makes it cost prohibitive to operate in New York, and the proponents of the bill, the Insurance Industry, know that. They do not want consumers to have this financial lifeline so that they can get the true value of their legal claim." The clergy leaders of New York support Dilan's "fair, ethical and transparent" legislation. They refer to A1270-A (the Consumer Litigation Funding Act) as "a wolf in sheep's clothing," which, as Mr. Schuller noted, is designed to eliminate Consumer Legal Funding from the state entirely. 
Case Developments Commercial

Sberbank CZ Litigation, Insolvency and Liquidation

The Central Bank of Russia founded Sberbank in 1991. Traded on the Moscow Stock Exchange, Sberbank is Russia’s largest universal banking institution with ⅓ of all Russian assets flowing through it. Given Russia’s war in Ukraine, the Czech National Bank revoked Sberbank CZ’s license at the beginning of May. Furthermore, a Czech Municipal Court in Prague ruled in favor of the liquidation of Sberbank CZ.  The litigation investment structure designed to consolidate Sberbank CZ’s creditors comprises a trio of Europe’s notable third party funders. Natland Investment Group has a hallmark collaboration with LitFin Litigation Financier and The Association of Small and Medium-Sized Enterprises and Self-Employed Persons of the Czech Republic.  The group’s promotional materials suggest a sophisticated approach to Sberbank CZ liquidation. Europe has experienced insolvency fire sales liquidating assets at pennies on the euro. Success metrics will gauge how fast the bank’s assets can be monetized … And at what price.  According to Sberbank’s liquidators, liquid assets total 24B CZK. However, liabilities usurp that value with 79B CZK in client levies, and 61B CZK in debt liabilities.